Accountant · Jacksonville, FL · Member since 2016 · 19 posts · 4 votes
Hello,
I am a newbie and this is my first Biggerpockets post, but I am excited about the possibilities of building a portfolio of passive rental income investments. I am especially interested in investing in rental houses in Tallahassee, FL. I graduated from FSU about 9 years ago. After that I moved to Jacksonville where I have been successfully working as a Tax Accountant. I have always wanted to own rental units in Tallahassee as I see an opportunity to rent by the room to college students from FSU, FAMU, and/or TCC. I am interested in discussing this process with anyone that is currently in this market in Tallahassee or anyone that is currently investing in rentals by the room to college students in other places.
Titus, welcome. I live here in Tallahassee and am working on getting into the market here, as well. At first, I thought the student rental market was a no brainer here, but after talking to a couple close friends, I'm not so sure. They tell me there have been some massive student oriented apartment complexes build over the last couple years that have flooded the market with more beds than there are interested students to rent them. I've seen them go up, but hadn't put it together in my head before talking to them. One has a few duplexes almost across from the business school section of campus. Prime area for student rentals and she's never had more than a transitional vacancy in the 10 plus years she's rented them till this year. The other friend I talked to actually works locally in housing and had similar observations.
That said, this is a great market from what I can tell in the numbers I find. I not by any means an expert, but I would suggest having alternative outs planned for anything you might buy for a student rental in case a project doesn't pan out.
I've recently found the Tallahassee Investors Network and those guys put together a great gathering once a month that I'd highly recommend you make the trip over for. There's a ton of good experience in the room and folks looking to help. I joined after my first meeting in September and can't say enough good things about Mark and Camille, who organize it all.
Welcome! I would definitely search around the forum with regards to college housing. I know a lot of people love it, but a lot also dislike it. College students can definitely be rough on the properties.
There was a thread a few weeks ago about renting by the room. I forget what exactly the problem was but people were bringing up issues they've had with roommates fighting and not getting along (which isn't your problem so much.. but still is annoying).
Titus, welcome. I live here in Tallahassee and am working on getting into the market here, as well. At first, I thought the student rental market was a no brainer here, but after talking to a couple close friends, I'm not so sure. They tell me there have been some massive student oriented apartment complexes build over the last couple years that have flooded the market with more beds than there are interested students to rent them. I've seen them go up, but hadn't put it together in my head before talking to them. One has a few duplexes almost across from the business school section of campus. Prime area for student rentals and she's never had more than a transitional vacancy in the 10 plus years she's rented them till this year. The other friend I talked to actually works locally in housing and had similar observations.
That said, this is a great market from what I can tell in the numbers I find. I not by any means an expert, but I would suggest having alternative outs planned for anything you might buy for a student rental in case a project doesn't pan out.
I've recently found the Tallahassee Investors Network and those guys put together a great gathering once a month that I'd highly recommend you make the trip over for. There's a ton of good experience in the room and folks looking to help. I joined after my first meeting in September and can't say enough good things about Mark and Camille, who organize it all.
You're correct that student housing is not a slam dunk as many assume, and certainly has it's nuances. While that is true about many new student apartments going up in Tally, the market isn't flooded with rental supply - I respectfully disagree and I think that's a simple way of looking at it. Those new student apartments are asking a very high price for rent, so if your rental is priced right you will certainly get a lot of attention from students. That being said, I think many investors in Tallahassee may need to up their games and consider renovating some aspects of their properties. I can't tell you how many older houses around campus that look like they haven't been updated since the 80's.
Generally speaking, I've heard most property management in Tallahassee is quite poor and/or lazy. There are a few good ones, but you better do your due diligence and don't just blindly pick one in town.
Other general observations about student rentals (not specific to Tally):
Nice thing is you can get parents to sign off as co-signors.
Downsides are you will have naturally high turnover and must account for the costs involved in those frequent turns - I did not factor this in when I first started. I haven't had many issues with students destroying my properties - and while it would be a little pain to deal with you can always go after their parents if they were co-signors.
Another downside is some students are entitled and/or not as independent as the typical renter - thus you must account for them contacting you more often if you decide to self-manage. Also - sometimes helicopter parents become involved which is something you may have to manage at times. Ways to mitigate this is to try and target (in accordance w/ fair housing) older students and/or grad students - they are typically much more independent.
Titus, Welcome. I live in tally, went to school here, and have a few rentals in town. I personally stay away from the student housing for the very reasons Doug Hall mentioned. One of the other big issues I've heard from my previous student housing landlords is getting someone to rent during the summer when most of the FSU students head home.There are a ton of student housing complexes that have gone in recently and there are more coming soon right on the edge of campus. I find better returns renting in blue collar neighborhoods in Tally.
I think Biggerpockets is a great resource and everyone on here is very helpful and open. When I attended 2 of the Tallahassee Investor Network meetings, which granted is not many, I found them uninformative (one podcast on Biggerpockets will teach you much more). It appears to me that the two that run it have found a great way to get some extra cash to invest on their own deals. I asked Mark how they were are finding their deals (direct mail, driving for dollars, etc) and he wouldn't give a straight answer and said something along the lines of "we just find them". Ok thanks for the answer?? They did tell me about a house (as if they were the only ones in the know) they knew of that was a great deal. Well I didn't consider it a good deal and it was on the MLS so not much of a secret. I get a very guru-ish feel from this group. I'd save my money for investing instead of this group and read up on biggerpockets for free...
I agree with @Mike Conner re: the Tallahassee Investor Network. I signed up for an annual membership over a year ago, and after attending 3 or 4 monthly meetings I observed many of the same things Mike did. Met a few nice folks networking there, but a lot of the info being put out there seemed very hack so I felt bad for most of the attendees if it was their only/first exposure to r/e investing. Also, I also felt like I was being talked down to by the two running it.
80% of the meetings/email blasts were promoting sponsors of the group. Unfortunately, it does seem like it's more or less an additional income stream for the two that run it. I wish it wasn't that way.
No argument at all on BP, Mike. I originally went looking for a source of knowledge on investing that was talking about the difficulties of investing and not about how it's the end all beat all of get rich paths. I can't express how grateful I am to Josh and Brandon for all they've done and put together here. It's amazing!
As far as TIN goes, I haven't actually spoken much to the organizers directly. I've spoken more to the other folks that have gone and the two meetings I've been to had agendas and folks coming in to talk and educate on various topics. The crowd has been at least 30 or 40 plus, I'd say, each time. I know they haven't been up and running long. A year, or so, I think. I've taken it as a place to make local connections and learn what I can, but I would never suggest it as a replacement for BP. If you have to pick one, pick BP every time. No doubts.
Hey Doug,
Absolutely! I love Tally. Thanks for the info and for giving me the lay of the land. Sounds like we are in the same boat and have similar goals. Let's stay in touch. I will look into the Tallahassee Investors group. Maybe we will meet in person some day soon.
Michael. I agree with your thoughts on making rentals more desirable to college students and with staying competitive through price. Price and proximity to campus were my main concerns as a student.
Well, Mike and Michael have me second guessing my recommendation. :-) My exposure so far is limited, so I'm hoping theirs was maybe early growing pains for the group. Since I've bought in for a year, I guess I'll see if anything comes out of it for me. I'm always very weary of anything that sounds like a guru pitch and I have gotten that vibe from a couple things I've heard, but the outside speakers have been informative and the folks around me pleasant and helpful, so we'll see. You can go to a single meeting for a small fee, so maybe check one out and see if it's for you. Let me know if you go and we can meet up and talk. Can't beat the food regardless. :-)
Mike,
Thanks for the info. I will keep my head on the swivel with regard to the investors group. I have not attended a meeting yet but I am hoping that they will be a good resource. I actually didn't think about blue collar renters. Maybe we can speak again as I get closer to making an investment.
The other thing we are seeing here in RI is legislation targeted at students. Particularly limits on unrelated people in a property. Know the local laws and keep an eye towards changes.
Thanks Colleen! I will keep that in mind and watch out for changes.
Michael, you mentioned that there are a few good property managers. I would like to get their contact info if you have it.
I've got a few properties around Tallahassee and for the most part have been selling off my student stuff. It's the biggest headache and I've started to notice the effects of all the new apartments. I still have an couple of sfr's but I would stay away from anything attached for students. Like @Mike Conner said blue collar neighborhoods seem to be a better bang for your buck.
1. Always have a parental guarantee. That way if there is a vacancy caused from a student leaving or damage from the renters, someone will cover the costs.
2. Start looking for new lessees early (6+Months before the end of the lease). In our experience, we have most of our student rentals leased in the winter before the next school year.
Just like any rental, success is usually decided before the lessees moves in, choose good tenants.